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FSB calls for a ‘regional minimum wage’

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The Federation of Small Businesses (FSB) has made its case for a regional based National Minimum Wage (NMW) pointing to its varied impact across the UK.

The NMW has affected some parts of the UK more than others; according to the Federation of Small Businesses (FSB)who have put their case for a varied NMW based on region to the Low Pay Commission.

As of 1 October the adult rate rose to £4.85 while the youth rate hit £4.10 and a new rate for 16 to 17 year old gave them the right to work for at least £3.00 an hour.

According to the FSB the NMW increases affect one in four businesses in Scotland, Wales and the northern regions of England compared to just under one in twenty in the south east of England.

Businesses in the service sector, say the FSB are the ones to suffer most. They report that one in three hairdressers, one in four hoteliers and one in five shopkeepers routinely see their business costs rise as a direct result of the NMW rate rises.

FSB Employment Chairman Alan Tyrrell commented:

“The National Minimum Wage has a disproportionate impact on businesses in Scotland, Wales and the North of England. Regional wage variations such as ‘London weighting’ are standard practice in many organisations and there is no compelling evidence to look at introducing a regional variation to the minimum wage.”

The LPC is currently viewing submissions from industry groups, unions and economists about whether and by how much the minimum wage should rise. It will announce recommendations early next year.

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